12C — May 12 - 25, 2017 — Commercial Real Estate Women — Pennsylvania — M id A tlantic

Real Estate Journal


Lehigh Valley Chapter www.crewlehighvalley.org Commercial Real Estate Women CREW Lehigh Valley Explores PA’s Medical Marijuana Act

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Allentown, PA —About 65 members and guests of CREWLehigh Valley attended an informative lunchtime ses- sion on Pennsylvania’s Medical Marijuana Act and its impact on commercial real estate, held at Brookside Country Club in late April. Organized and moderated by Julie Macomb, Esq., an as- sociate of Norris McLaughlin &Marcas, PA and a CREWLV board member, the program began with an overview of the two-tiered structure proscribed by state law concerning mari- juana growers/processors and dispensaries. Julie noted that Pennsylvania is divided into six medical marijuana regions, with each region being granted up to two grower/processor permits for a total of 12 across the state during the Phase I roll out. Twenty-seven primary dispensaries will be identified across the state, each with the potential to operate up to two additional locations within the same region. As marijuana is still an illegal substance under federal law, many conflicts exist. The financial industry can- not handle funds generated by or involved with the newmari- juana industry. Susan Youngs, Wells Fargo Bank, cited the federal controlled substance act of 1970, which states it is illegal to manufacture, distribute or dispense mari- juana. She noted that finan- cial institutions are required to file a Suspicious Activity Report (SAR) if a transaction is known or suspected to in- volve funds derived from an illegal activity. Failure to file such a report with the federal

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Becky Bradley, AICP, Lehigh Valley Planning Commission (left) and Lisa Pektor, PennCap Properties

Julie Macomb, Esq.

government can lead to loss of the bank’s charter or FDIC insurance, or result in fines, penalties, and criminal ac- tions against the bank. Susan cited the dangers and difficul- ties of operating a cash only business and further noted that businesses that provide indirect support to the medi- cal marijuana industry (such as landlords or vendors) could also face banking implications. Denise Hozza, CPA, CVA, Concannon Miller, discussed tax implications. According to the Controlled Substances Act, Code 280 ( E), passed in 1982, businesses involved in this industry may not deduct ordi- nary and necessary business expense from gross income. This issue alone may make the effective federal tax rate for a cannabis based business any- where from 50% to 70% greater compared to a traditional busi- ness. The state will impose a 5% excise tax on gross receipts but consumers will not pay a 6% sales tax. Lisa Pektor, PennCap Prop- erties, noted the special re- quirements manufacturing

Susan Youngs, Wells Fargo Bank Denise Hozza, CPA, CVA

facilities will need regarding electrical capacity, HVAC, security and waste disposal. She stated that former bank buildings may be ideal dispen- sary sites as they are already outfitted with vaults, customer service areas, private offices and security systems. Becky Bradley, AICP, Leigh Valley Planning Commission (LVPC), observed that a 2013 US Department of Justice Memo states there will be no prosecution for businesses op- erating in a manner consistent with state statute. LVPC is working to help municipalities

meet land use and planning implications under the Mu- nicipal Planning Code. Land use recommendations include considering potential optimal locations with dispensary ac- cess to public transit routes or higher order roadways and medical facilities and locating growers where there is access to adequate water and sewer facilities. She suggested add- ing performance standards to local zoning ordinances and noted that 12 Lehigh Valley municipalities had already re- vise their zoning ordinances to include medical marijuana. n

D arlene P ors H ope P earson P ublicity B etsy S tory -B ono T ina H onthy S ocial M edia K aisha R osa A bigail M artin C ommunity S ervice J ody K ing C assidy F laherty N ominations K ristin H olmes P am M orris B etsy S chamberger S ponsorship P am M orris P rograms J ennifer K ennedy

SPONSORS Gold BB&T • Concannon Miller • Liberty Property Trust • Duke Realty • PennCap Properties • Norris, McLaughlin & Marcus Pennoni • Fitzpatrick Lenz & Bubba • Servpro Patron Tubiello-Haar Associates • Boyle Construction • ECSI • Newmark Grubb Knight Frank Contributor NAI Summit • Gross McGinley • MKSD • Hanna Frederick Commercial • Campbell Rappold & Yurasits • Fox Rothschild Friend Barry Isett & Associates • Buckno Lisicky & Co • CFI-Knoll • DesignPoint • Feinberg Real Estate Advisors HMK Insurance • Holmes Cunningham Engineering • Jerdon Construction Services • J.G. Petrucci Co, Inc. K+H Custom Window Treatments • Langan Engineering • QNB Bank • RCN • Spillman Farmer Architects

S haron M ichael F rancee F uller F oundation C hampion A nnie O sika D elegates L isa P ektor P enn C ap P roperties F or membership information contact : D arlene P ors drpors @ htlyons . com

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